Recent doom-laden reports of the stock market crisis in the media have reminded me of a couple of “Dad’s Army” catch phrases. One is tempted to repeat Private Fraser’s “We’re all doomed!”, or to run round like Corporal Jones shouting “Don’t panic! Don’t panic!”.
Many of the journalists covering the recent stock market crisis weren’t adults during the last serious recession. A long period of growth has perhaps allowed us to lose our sense of perspective.
To take an extreme example, I have heard last week being compared with the Wall Street Crash of 1929.
This really is a wild exaggeration. In a 30 day period over October/November in 1929 ("The Wall Street Crash") the Dow Jones Index went down by 42% from 345 to 200. Moneymen were seen throwing themselves off the skyscrapers in Wall Street and there were resultant soup kitchens, cardboard cities, lines of people begging and "Brother, can you spare a dime".
Even if you take the whole of the 30 days up to 24th September and take the highest and the lowest point, the Dow Jones Industrial Average only went down by 9% from 11600 to 10600. Today it is at 10825, down 5.8% from the 1st September when it was 11,500. Compare that to 2003 it went under 8,000.
While not wishing to minimise the hardship and worry caused to people in the current economic situation, we really need to put things into perspective.
Inflation is at 5%. In 1975 it was 24%. Obviously, things like petrol and food are going up faster than the headline rate. But still, in an historical context, inflation is nothing like as high as it has been at times.
Unemployment is at 5.5%. In 1982 is was 12.5%.
Many talk of an energy crisis. Yes, we should be concerned about energy supply and use. But some of us remember the three day week in the early 1970s when we had scheduled power cuts, industry closed for two days a week other than weekends and all television broadcasting stopped at 10.30pm. Now that’s what I call a “crisis”.
I certainly don't wish to under-estimate the need for action to stem the credit crunch - the market will certainly go down further if there is no "end game" in sight. And of course, there are bound to be knock-on effects further down the road. Having been unemployed myself, albeit for a short period, I don't discount the hardship and worry caused to just one unemployed person and their family.
But we are in danger of talking ourselves into an unnecessary tizzy.
In particular, one thing which I found was missing from current discussions is putting a positive perspective on how we lead our lives in a recession in connection with preserving the planet.
By far the greatest threat facing our planet is global warming. If the glaciers continue melting and there are wars breaking out over water supply, worries about the stock market will seem silly.
We should be focussing on the "win win" which we can derive from certain domestic measures in a potential recession.
Improving the energy efficiency of our homes, being more fuel efficient with our travel and growing more of our own food will save money so that we are better able to get through any economic turbulence, while doing our bit to help minimise the effects of global warming. This is a great, positive message. We should be turning the fears of a recession to positive effect. We have all, as a human race in the western world, wasted a lot of resources in recent years. The need to save money can have the big positive knock-on effect of help to save the planet as well.
I find it quite disturbing that this link is not being made more widely.